Forest ownership is considered as vital for sustainable management of forest and its associated biodiversity. The Global Forest Resources Assessment 2015 reported an increasing rate of privately owned forests on a global scale. However, deforestation was found to be very active in privately owned hill forest areas of Malaysia. Three forest reserves and three adjacent private forests from Penang State was purposively chosen as this state has been experiencing a quick and radical changes due to urban expansion over the last three decades. In this study variation in biodiversity were measured using community structure of both vascular plants and avifauna species along selected micro environmental variables. Finally implications for conservation were proposed considering the current state of deforestation in private hill forest (PHF). Plant community and avifauna analysis revealed that government hill forest areas (GHF) were more diverse and healthier than PHF, also rich with higher evenness. Species richness between GHF and PHF showed significant difference in plant species (p < 0.05) but not for avifauna. Avifauna diversity analysis recorded higher abundance of birds in PHF and finally appeared as buffer service provider for avifauna diversity in GHF reserves. But the current rate of deforestation in PHF is 1.4% annually. Thus any alteration to hill forest cover (land development activities) should be banned immediately with intensive care to the PHF through co-management. Moreover human activities inside the GHF should also be controlled to conserve the remnant species of the island as conspicuous disturbance were also found inside GHF.